Alarum Technologies shares collapse after FBI seizes domains tied to its proxy unit

Shares of Alarum Technologies, a data-collection company listed in both Tel Aviv and New York, fell more than 70 percent in Tel Aviv after reports that US authorities are investigating its business, Globes reported. The decline weighed on the broader Tel Aviv market, where dual-listed technology shares led the losses, according to Globes.

The Federal Bureau of Investigation (FBI) is examining whether NetNut, an Israel-based Alarum subsidiary that sells access to residential proxy networks, is linked to software used to co-opt people's internet-connected devices without consent, Bloomberg reported. The US Department of Justice said the FBI had seized multiple internet domains tied to NetNut's platforms as part of a coordinated law enforcement action. The company's US-listed shares had already fallen about 24 percent in after-hours trading.

Alarum said it was informed of the domain seizure on July 2 and would cooperate fully, adding that it takes the matter seriously and wants any misuse of its infrastructure investigated. In a further statement on July 3, the company said the FBI had since seized additional domains associated with NetNut and that it was already experiencing disruptions to a portion of its services, which, if prolonged, are likely to have a material adverse effect on its operations, financial results and ability to serve customers. Alarum said that as of that update neither it nor NetNut had been formally contacted by the FBI or any other regulator, and that it was continuing to investigate whether third parties had used its network for unlawful purposes. The investigation has reportedly been under way for more than a year.

Residential proxy networks route internet traffic through ordinary home devices, a service with legitimate uses in data gathering but also open to abuse. The enforcement action signals rising regulatory attention to the infrastructure that underpins large-scale automated data collection.